Project on Amul Cheese (2)
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Transcript of Project on Amul Cheese (2)
7Project on
Amul cheese
Subject: Managerial Economics
Lecturer: Ms.Mughda Joshi
Mahesh
SonaliStewart
Manjiri
Chaitali
Group members having a discussions about the project
Module:1
Module:2
Module:3
Module:4
Index
About the product
Demand analysis
Cost & Revenue concept
Market structure
Module :1About the Product
Introduction to the company
Amul "priceless" in Hindi.
The brand name "Amul," from the Sanskrit "Amoolya," meaning Precious was suggested by a quality control expert in Anand, formed in 1946, is a dairy cooperative in India.
It is a brand name managed by an apex cooperative organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 3.1 million milk producers in Gujarat, India.
Amul is based in Anand, Gujarat and has been an example of a cooperative organization's success in the long term.
REASONS FOR SUCCESS
Robust Supply Chain
Low Cost Strategy
SUCCESS!!
Diverse product mixAmul Butter, Ghee, Milk Powder, Cheese,Chocolate, Shrikhand, Ice Cream, Amulspray,Milk, Nutramul And Amulya
Strong Distribution network
Technologhy And E-Initiatives
Amul Products Diversification
1946 1999 2007 2008 2009 20100
2000
4000
6000
8000
10000
12000
Amul Growth RateAnnual Turnover of 4300 Crore (2006-07)Rs 10000 Crore mark in 2010Five decade to became Rs 2000 Crore entity but the turn over doubled to over Rs 4300 crore within nineyears form 1999-07
Amul marketing
in rural India
Members : •2 district milk producing units
Number of producer members: •3.11million members
Number of village societies: •11,962 villages
Total milk handling capacity: •9.91million litres per day
Daily average milk collection •6.31million litres
Sales turnover: •US$1068million in 2011
Biggest strength : •supply chain management
Module:2 Demand Analysis
Demand for Amul products
The demand for Amul can never fall because of the types of products produced by them.
They produce quality products and have won the hearts of Indian people and is become the taste of India for more than 60 years.
Due to the customer and industry based approach of the company
Customer Based Market Segmentation
Kids
Women
Calorie Conscious
Health Conscious
Youth
Amul Kool Chocolate MilkNutramul Energy DrinkAmul Kool Millk Shake
Amul Calci +
Utterly Delicious PizzaAmul Emmental CheeseAmul Cheese Spreads
Amul LiteSagar Skimmed Milk PowderAmul Lite Slim and Trim Milk
NutramulAmul Shakti Health Food Drink
Industry Based Market Segmentation
Milk
Butter/Cheese/Ghee
Ice-cream Manufacturers
Restaurant/Food Chains
Temples
Bakery & Confectionaries
Pizza Retailers
Snacks Retailers
Coffee Shop Chains
Amul – Product Portfolio
Category Market Share Market Position
Butter, Ghee 85% 1
Milk Powder 40% 1
Cheese 50% 1
Ice-cream 24.75% 2
Sweets 50% 1
Chocolate Drink 90% 1
Chocolate 10% 3
Module:3Revenue Concept
STRATEGY
As its product lists, GCMMF has capitalized on the value added segment with a wide range of Amul cheeses.
The Amul brand represents 'value for money' to the Indian consumer and its cheese portfolio is competitively priced and of assured quality.
The company has been aggressively marketing its cheese products, to the extent of even moving away from its umbrella brand strategy and introducing a new mascot, the Amul Cheese Boy.
STRATEGY
When low cost pizzas were introduced, Amul adopted an innovative and successful strategy of increasing sales of an elitist product (cheese) by reducing the price of another elitist product (pizzas).
Especially since 2005, the company has focused on expanding its already strong distribution network to smaller cities as cheese demand has rapidly expanded beyond the large metros.
10000003000002500003000003500002000002500001500001000005000010000015000032000001845003384500
1032.533.522.51.510.511.581.845
33.845
Particulars CPU Amount
COST SHEET
Opening StockRaw MaterialsDry FruitsMilkFlavorsOther IngredientsSugarCupCutlerySeasonal FruitsWaffleCocoa Carriage InwardRAW MATERIAL CONSUMED
Direct Expenses Direct LabourPRIME COST Factory Overheads: Fixed:Depreciation Rent Power Insurance Supervisor’s SalaryVariable:Electricity Running exp of machineWORKS COST
2.25.340.045 2.511.751.50.6 0.719.05
50.395
2200005300004134500 25000010000017500015000060000 70000100000905000
5039500
Particulars CPU Amount
Office OverheadsEmployee CostOther Expenditure:Computer TelephoneTaxesCarriage OutwardCOST OF PRODUCTION Opening Stock-Closing StockCOST OF GOODS SOLD
10
1.20.10.40.262.295 2 64.295
1000000 1200001000040000200006229500 200000 6429500
Particulars CPU Amount
Particulars CPU Amount
Selling&DistExps:
Advertisement
Delivery Vehicles
Petrol
Packaging Rates
COST OF SALES
PROFIT
SALES
43.51.750.50574.05
18.5
92.5625
400000350000175000505007405000
1851250
9256250
MARGINAL COST SHEET
9256250 320000033845002671750 9050001000000100000190000476750
SALESVariable Cost:Purchases RM ConsumedCONTRIBUTION - Fixed Cost Factory Expenses Employee Cost Depreciation Other ExpenditurePROFIT
COST SHEET ANALYSIS
The company is producing 100000 units of cheese at Rs. 74.05 for which the total cost incurred is Rs. 7405000 and the total sales is Rs. 9256250 which implies that that the profit being made is Rs. 1851250.
The company is producing a single cup of cheeseat Rs. 92.5625 which includes the cost of a cheese at Rs. 74.05 which again implies that the profit of Rs. 18.5125 is earned on a single unit of Amul ice cream.
Module:4Market structure
Types of market
structures
Monopolistic competition
Perfect competitionOligopolistic
competition
Oligopoly competition
Definition:An oligopoly is a market form in
which a market or industry is dominated by a small number of
sellers (oligopolists). The word is derived, by analogy with "monopoly", from the Greek
ὀλίγοι (oligoi) "few" + πωλεῖν (polein) "to sell".
Because there are few sellers, each oligopolist is likely to be
aware of the actions of the others.
Strategy to sell• Create goodwill in the
market due to less number of sellers.
• There is less competition they become the price maker
• They maintain their quality to be the taste of India.
SWOT Analysis
Strength
Weakness
Opportunity
Threats
1. Creative advertising2.High brand presence3.High visibility4.Excellent product quality and trusted name
1. Low product range/ taste
1. Smaller packages2.No frills packaging for rural customers at lower cost 3.New tastes/varieties4.Tieup with restaurants/food chains/pizza parlors
1. Growing market share of other players